by Travis Johnson, Stock Gumshoe | May 17, 2013 5:30 pm
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Money never stops buying happiness. I Bought LOV. As you memtioned Spark Networks on the second day of the Investment Congress. I picked up LOV shares. See how this will work out.
Thanks, Travis.
I have looked at rosetta stone kiosks in malls and airports and they seem to do very little business. I wondered how they continued to survive Charles O’Malley
How do you feel about the 3D printer companies that a MOTLEYre being promoted by
I suggested them last Summer, suggested taking profits in January, and watched as they dipped without having enough confidence to jump back on them again. The valuations have been pretty far out ahead of actual earnings growth, but the earnings growth is there so far. I still check in on them from time to time, and the newsletters are still pushing them almost as hard as they did last year.
Charles:
If you want to know or learn more about DDD.
Please go to: http://www.citronresearch.com
Search
stock Ticker: DDD
on 2-14-13, Mr. Left had 14 pages about DDD. It will raise your blood presure.
I am a fan of Mr. Left. He is about 87% right.
I started watching RST on 1/31/12 @ $7.77 a share thanks to one of the Gardner brothers. Since then the stock is up 118%. With that much of a rise in a little over a year, do you still consider this a “value”?
I have continued to watch the stock, but of course I never pulled the trigger on a buy to make all that money, lol! I am just looking for opinions on aspects of value after that much of a rise.
I didn’t consider it a value back then, for sure, because it was in the middle of a management train wreck. Now that they have it headed in the right direction, including their recent acquisition and their movement to subscriptions and app delivery, I think they have a far better chance of growing into the valuation and consolidating the “beginner language” industry further. Value doesn’t depend on what the stock has done recently, though I too find it very difficult to buy a stock that has doubled — value depends on what a company owns and can produce today and what it will be doing in the future.
Buying into a growth story almost always means you’re buying a stock that has already risen, but if RST had been on the right trajectory when it IPO’d and hadn’t wasted a couple years and a lot of cash on ineffective expansion campaigns overseas, and on kiosks instead of iPad apps, I expect they would have growth more consistently from that IPO price and might already easily be in the $30s or 40s. We’ll never know, of course, and the kiosks did at least have the benefit of increasing their brand awareness further in the US, but I think we have a chance of capturing a growth story pretty early on here … one that, thanks to their cash generation capacity and their cash pile, is not particularly expensive.
Thank you for your response, Travis! Keep up the great work!
Im not so sure about this transition to subscription. The old DVD’s were personal possessions…..they encouraged brand and method loyalty coz you couldnt ask for your money back and switch to some other method ! The subscription method allows people to ‘graze’. And the best way someone can encourage a herd to migrate, is by offering an ‘own brand’ product for much less. My guess is they will do v well initially while there’s little competition…..but as competition increases (as it must), RST’s profits will be cut to ribbons. But the real ‘not so long term’ risk, is the smart phone. It really wont be long before software allows you to say ‘ Hello my name is Fred…….’ and have repeated back (perhaps into earphones or some form of Google Glasses), in any beginner level language you like. In fact the listeners would choose their preferred language, so that a Chinese speaker could address the UN assembly in dozens of languages simultaneously (a job presently done by human interpreters). When that’s a reality, you wont be able to give RST courses away at a yard sale.
I already have an app that will translate my typing into multi lingual audio. No its not perfect, but practice makes perfect….and boy are those software engineers practicing.
Babel fish anyone? (Hitchhikers Guide to the Galaxy)
Today I bought my first exposure to RST. Telling my son (a fire fighter) he said the EMT has an app on his android that does exactly what Alan speculated will occur. The EMT speaks into the phone and hands it to the non English speaker were the phone translates what he said. The patient response into the phone and he listens as it is translated back into English.
Dare we think out loud at all, there is someone listening, and presto-change there’s an app!?!?!
The future may indeed be one of smartphones and translation software. I guess, when your battery dies so does your ability to communicate. Oops! The technology already exists but that future isn’t quite here…yet. The actual ability to speak and understand has benefits beyond reliance on a “smart”phone. However; even if translation technology didn’t exist, those people relying on their “smart”phones would probably not be RST clients anyway. Learning a language takes desire not to mention effort. Those who buy a language program are people who want to actually learn…I would hope. RST caters, now and in the future, to a clientele of like-minded individuals who purchase because they want or need to learn beyond what a “smart”phone translation can give them. Will that number will be enough to sustain the current RST busness model? Who can say with any certainty. It seems to be working now. In the near term, RST could do well in an increasingly globalized world. ..and they may be able to adapt to a future paradigm shift as they seem to have adapted to the current paradigm.
John, I concurr with your analysis. I think with business becoming more and more globalized, the need is there to become bi or tri lingual. I don’t envision a smart phone replacing good old fashioned eye to eye communication for awhile
You would still have eye to eye and judgement of body language…..just the lipsync would be weird. But as said: in the short term RST will work, but its not a stock to fit and forget.
As for the battery running out….thats just silly. If you cant remember to charge your phone, how will you remember ‘Wheres the socket…’ in Cantonese?
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Hi all, did anyone buy this stock? I got in at 17 a while ago and a bit disappointed with yesterday’s announcement and the subsequent dip to 15. Is this a buying opportunity or is it better to just wait it out for the price to work it’s way back up?
That’s the possible weakness from insider/venture selling that we and the D3 folks mentioned as being quite possible after those big investors signaled their intention of stepping back from the stock by leaving the Board of Directors.
This secondary offering is of existing stock held by private investors, not dilution, but it wasn’t in the free float before. If you like the way things are going otherwise, this is probably a buying opportunity — I have not bought shares personally but if this dip continues without any fundamental weakness at the company I’ll be more likely to do so (having a secondary offering in a weak market almost always hurts a stock, though for this one there’s no dilution and I think it’s unusual that the stock fell this far below the offering price of $16, even if you are a bit concerned that early investors are leaving). The company doesn’t report earnings again until August, so it’s likely to be quiet for a while, and they shouldn’t be doing any more secondary offerings of their own to surprise anyone in the near future (they have more than $6 in cash per share).
Thanks for the quick reply Travis! I will wait for price to stabilize before adding more.